Elon Musk and Companies Sued Over Alleged Dogecoin ‘Ponzi Scheme’

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Elon Musk and his com­pa­nies Tes­la and SpaceX are being sued over claims they have been involved in a Ponzi scheme to back the Doge­coin crypto.

The law­suit claims that Musk and his com­pa­nies were involved in a rack­e­teer­ing effort to raise the price of the DOGE token. 

Investor Kei­th John­son claims that Musk and the com­pa­nies were pro­mot­ing the token as a legit­i­mate invest­ment when it has no val­ue at all. He rep­re­sents a larg­er group of investors who have lost mon­ey by invest­ing in the asset.

Doge has no value, claims investor

“Defen­dants false­ly and decep­tive­ly claim that Doge­coin is a legit­i­mate invest­ment when it has no val­ue at all,” John­son said in his com­plaint, filed in fed­er­al court in Manhattan.

“Doge­coin is not a cur­ren­cy, stock, or secu­ri­ty. It’s not backed by gold, oth­er pre­cious met­al, or any­thing at all. You can’t eat it, grow it, or wear it,” the law­suit continues.

“It’s sim­ply a fraud where­by ‘greater fools’ are deceived into buy­ing the coin at a high­er price.”

John­son is seek­ing $86 bil­lion in dam­ages, plus fur­ther dam­ages of $172 bil­lion, as well as an order block­ing Musk and his com­pa­nies from pro­mot­ing Dogecoin. 

DOGE Price: TradingView

He fur­ther wants Doge­coin trad­ing to be clas­si­fied as gam­bling under fed­er­al and New York state law. The price of DOGE dropped 6% fol­low­ing the news. 

The com­plaint said Dogecoin’s sell­off began around the time Musk host­ed the NBC show Sat­ur­day Night Live and, play­ing a fic­ti­tious finan­cial expert on a Week­end Update seg­ment, called Doge­coin “a hustle”.

State­ments from Elon Musk are a com­mon occur­rence in the cryp­to mar­ket and often have con­se­quences. John­son was like­ly refer­ring to Musk’s influ­ence and how it can result in a mas­sive jump in DOGE’s prices.

Musk recent­ly react­ed to Dogecoin’s founder, say­ing that 95% of cryp­to are scams. He has yet to com­ment on the action.

The case is list­ed as John­son v. Musk, 22-cv-05037, US Dis­trict Court, South­ern Dis­trict of New York (Man­hat­tan).

Disclaimer

All the infor­ma­tion con­tained on our web­site is pub­lished in good faith and for gen­er­al infor­ma­tion pur­pos­es only. Any action the read­er takes upon the infor­ma­tion found on our web­site is strict­ly at their own risk.

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